Correlation Between NYSE Composite and IShares Ethereum
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and IShares Ethereum at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and IShares Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and iShares Ethereum Trust, you can compare the effects of market volatilities on NYSE Composite and IShares Ethereum and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of IShares Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IShares Ethereum.
Diversification Opportunities for NYSE Composite and IShares Ethereum
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and iShares Ethereum Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Ethereum Trust and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with IShares Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Ethereum Trust has no effect on the direction of NYSE Composite i.e., NYSE Composite and IShares Ethereum go up and down completely randomly.
Pair Corralation between NYSE Composite and IShares Ethereum
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.04 times less return on investment than IShares Ethereum. But when comparing it to its historical volatility, NYSE Composite is 6.3 times less risky than IShares Ethereum. It trades about 0.08 of its potential returns per unit of risk. iShares Ethereum Trust is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,624 in iShares Ethereum Trust on August 28, 2024 and sell it today you would earn a total of 36.00 from holding iShares Ethereum Trust or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 18.91% |
| Values | Daily Returns |
NYSE Composite vs. iShares Ethereum Trust
Performance |
| Timeline |
NYSE Composite and IShares Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
iShares Ethereum Trust
Pair trading matchups for IShares Ethereum
Pair Trading with NYSE Composite and IShares Ethereum
The main advantage of trading using opposite NYSE Composite and IShares Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, IShares Ethereum can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares Ethereum will offset losses from the drop in IShares Ethereum's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| IShares Ethereum vs. Grayscale Bitcoin Trust | IShares Ethereum vs. Grayscale Bitcoin Mini | IShares Ethereum vs. First Trust SkyBridge |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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